+1!
Fun to drive, surprisingly roomy interior (two bicycles + car camping equipment + backpacking equipment + fishing gear + luggage for one week for two people easily fit in the back with the seats down), Honda quality all for well under 20k new. I'm hoping to keep mine for at least 15 years (my civic lasted nearly 17). Really, isn't any car paid for in cash and kept for 15+ years Bogleheadish?

+1 Ditto on all the above. When I think back on what I paid for the new
Fit, I couldn't ask for more bang for the buck.

Indeed. Count me as another highly satisfied Fit owner! Its list of virtues goes on and on.

The perfect Boglehead car is made of parts from all sorts of cars parts which are select from existing models based on the market capitalization of various auto manufacturers. One slight variation is that 70% of the parts comes from domestic brands because one does not want to "over-weight" in foreign parts should replacement be necessary and incur unexpected currency risk. Note: this has led to too many GM, Ford and Dodge parts but nothing is fair in this efficient market.

The cars all tend to pull to the right a bit (I hope this will not be removed because it seems somewhat political), but they actually do this because the tires also are selected by market capitalization and the single narrower european treads mounted on the right front wheel tend to track this way. Thanks god for Goodyear and Firestone.

I have selected a large car blend vs. the total, mid-sized or smaller models. I find the additional weight might pay dividends should any last minute corrections become necessary. I know that I am paying for this in fuel consumption but I am an American and the engine could run on corn and I don't care.

lightheir wrote:Curious why depreciation shouldn't matter if you're driving it into the ground.

Assuming you buy a used car, you may have to replace it a few years earlier than if you had bought a brand-new one assuming roughly equal life (from brand new to full dead) but you're skipping over those years of max depreciation. So if you save, say $5000 by buying a car 4 years old, and repeat with another used car when it dies, you'd be avoiding that initial new car depreciation hit. Or am I missing something here?

I agree. Depreciation is an exponential decay, and buying used allows the buyer to skip the steep part of the curve. That's assuming that used prices are not inflated. Maybe the market is becoming efficient enough to recognize that the steep depreciation curve in the first few years is not justified, given the reliability of today's cars.

yukonjack wrote:If you are going to drive into the ground why not start with new. Many of the Asian mid-sized sedans would fit the bill.

I hate the thought of driving a car off the lot and losing 5-10% immediately. And although I plan to drive it into the ground, I like having the option value of being able to sell it on should something change.

Being less experienced in car buying, I don't understand this. Is the 10% drop from the price you paid to the price you can sell for? If you bought a used car from a dealer for $8K, you wouldn't be able to sell it for $8K after driving it off the used lot, right? So there would be a "drop" in value for used also.

Desert wrote: Maybe the market is becoming efficient enough to recognize that the steep depreciation curve in the first few years is not justified, given the reliability of today's cars.

Today's cars are not reliable. Even Toyota has numerous recalls. Fit and finish of many cars of 20-30 years ago may have been shoddy, but the cars lasted and they were much less expensive to maintain. The maintenance costs of today's cars are out of control. All new headlamps and headlamp housing costs hundreds of dollars for a Chrysler 200. That kind of overhaul for a 1983-1987 Chrysler New Yorker is less than $50. Tires for new cars are also a ripoff. I got two brand new all-season tires for $126 installed ('87 Chrysler).

Desert wrote: Maybe the market is becoming efficient enough to recognize that the steep depreciation curve in the first few years is not justified, given the reliability of today's cars.

Tires for new cars are also a ripoff. I got two brand new all-season tires for $126 installed ('87 Chrysler).

So, old cars and new ones require different tires? Interesting, I can put new tires on all four corners of my '09 vehicle for ~160. What year your car was made has zero to do with the type or cost of tire it requires.

Desert wrote: Maybe the market is becoming efficient enough to recognize that the steep depreciation curve in the first few years is not justified, given the reliability of today's cars.

Tires for new cars are also a ripoff. I got two brand new all-season tires for $126 installed ('87 Chrysler).

So, old cars and new ones require different tires? Interesting, I can put new tires on all four corners of my '09 vehicle for ~160. What year your car was made has zero to do with the type or cost of tire it requires.

Many newer cars come with lower profile tires which do cost more. I am showing that a 2013 Honda Civic and 1987 Chrysler New Yorker tires cost the same on tirerack.com. Even throwing in my 04 Accord with factory upgraded 16" rims still within same range as New Yorker. Most people don't know how to shop for things such as tires. I mostly buy them from tirerack.com and have a local shop install them. I have also purchased from discounttiredirect.com twice when they were having their crazy sales once a year.

Desert wrote: Maybe the market is becoming efficient enough to recognize that the steep depreciation curve in the first few years is not justified, given the reliability of today's cars.

Tires for new cars are also a ripoff. I got two brand new all-season tires for $126 installed ('87 Chrysler).

So, old cars and new ones require different tires? Interesting, I can put new tires on all four corners of my '09 vehicle for ~160. What year your car was made has zero to do with the type or cost of tire it requires.

Many newer cars come with lower profile tires which do cost more. I am showing that a 2013 Honda Civic and 1987 Chrysler New Yorker tires cost the same on tirerack.com. Even throwing in my 04 Accord with factory upgraded 16" rims still within same range as New Yorker. Most people don't know how to shop for things such as tires. I mostly buy them from tirerack.com and have a local shop install them. I have also purchased from discounttiredirect.com twice when they were having their crazy sales once a year.

Don't forget to consider your market as well. In my area, Subaru wagons maintain far more of their value than other brands/models because of weather and recreation considerations. The situation in your area may be different. Blue collar markets put a premium on trucks and older used cars. Californians typically put a higher premium on gas mileage.

Desert wrote: Maybe the market is becoming efficient enough to recognize that the steep depreciation curve in the first few years is not justified, given the reliability of today's cars.

Tires for new cars are also a ripoff. I got two brand new all-season tires for $126 installed ('87 Chrysler).

So, old cars and new ones require different tires? Interesting, I can put new tires on all four corners of my '09 vehicle for ~160. What year your car was made has zero to do with the type or cost of tire it requires.

Many newer cars come with lower profile tires which do cost more. I am showing that a 2013 Honda Civic and 1987 Chrysler New Yorker tires cost the same on tirerack.com. Even throwing in my 04 Accord with factory upgraded 16" rims still within same range as New Yorker. Most people don't know how to shop for things such as tires. I mostly buy them from tirerack.com and have a local shop install them. I have also purchased from discounttiredirect.com twice when they were having their crazy sales once a year.

These days you have to be more careful to buy tires recommended for your vehicle because new features like stability control (standard since 2012 models) and tire pressure monitoring are finicky about the tires.

Don't buy more than you need. Way up front someone mentioned new cars costing $30K. No need to spend that much. If you don't need a mid-sized don't buy one. If you need a mid-sized, don't buy full sized. If aren't going off road, don't buy an SUV. Etc.

Don't buy up the trim line (sure if you want, but the question was for a Boglehead car). Base models all come with power locks, windows, decent enough sound systems, etc.

Very hard to get good deals on used these days, not impossible, but may take more work that it is worth, and mostly you end up with more bells and whistles than you need or want, so new base model is actually cheaper. Late model fairly popular models stopped being a real bargain more than 10 years ago (mostly, sometimes you get lucky).

Buy something with a good repair record and something the local shop can repair for a decent price. Probably means Japanese or American, not German.

We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

In 2002, I bought a 5 year old Toyota Camry with 55k miles on it for $9000, drove it for 11 years until it had 198k miles on it, and sold it for $3000 last year. After all those miles, it still didn't make even a single weird noise and drove as smooth as ever. The guy who bought it is hands on with car repairs, his brother is a auto mechanic, and he predicts he will drive it for at least 5 to 10 years. I can't think of a better family car.

The most recent model you can afford. Many innovative safety technologies, which were only seen in luxury models, are now available even in entry-level cars. They allow you to avoid accidents and to survive the ones you can't avoid. Please value your life and limbs over your net worth.

PowDay wrote:I don't disagree with the math below if MPG is your only concern, but comparing a subcompact fit, to a midsize Prius isn't a fair argument. I updated your post below using the same methodology and the breakeven point is much quicker. 12k miles a year is also fairly low yearly miles, increase that to 15-20k per year and the break even is much sooner.
Though its impossible to predict, a hybrid is a hedge against gas prices.

I'm not going to present the math in detail, but will share my current thinking on the topic.

First, I don't feel the need to buy new, and I suspect the used car pricing disparity between Priuses and non-hybrids is smaller than that between the respective new-car prices. The "word" in various columns is that older Pruises are showing quite good long-term reliability.

Second, if you live in areas affected by storms, the Prius can do double duty as a particularly efficient generator. I previously wrote in detail about a colleague who powered his home for four days during Sandy and used only a half tank of gas during that time. Of course, you'd have to buy a few accessories (including an invertor) and learn how to safely change the connections in the your home's electrical junction box. However, this seems well worth doing when one considers the prospect of going without heat in February due to a storm - sadly, something that about one million New Englanders are currently experiencing.

lightheir wrote:Curious why depreciation shouldn't matter if you're driving it into the ground.

Assuming you buy a used car, you may have to replace it a few years earlier than if you had bought a brand-new one assuming roughly equal life (from brand new to full dead) but you're skipping over those years of max depreciation. So if you save, say $5000 by buying a car 4 years old, and repeat with another used car when it dies, you'd be avoiding that initial new car depreciation hit. Or am I missing something here?

Yes. New car should in theory last 4 years longer than an old car and be under warranty during that initial period (less maintenance costs). I'm sure some will argue it’s trivial. Also, less sales tax paid say every X years new vs every X-4 years used.

To some extent it depends on a person's needs. If they don't drive many miles the used car may always prove to be the better deal regardless, from an original cost of investment standpoint. There's probably just to many variables to consider, so overall either buying new or used and driving 12+ years on a new or 8+ years on a used model should yield similar results.

lightheir wrote:Curious why depreciation shouldn't matter if you're driving it into the ground.

Assuming you buy a used car, you may have to replace it a few years earlier than if you had bought a brand-new one assuming roughly equal life (from brand new to full dead) but you're skipping over those years of max depreciation. So if you save, say $5000 by buying a car 4 years old, and repeat with another used car when it dies, you'd be avoiding that initial new car depreciation hit. Or am I missing something here?

Assuming a 10 year life for a car, over the course of 40 years you will be buying 7 used cars and 4 new cars. At 20k per new car, thats 80k vs 105k for the used cars.

If you drive your cars until they are 15 years old, you will have bought 3 news cars for 60k and 4 used cars for 60k.

"Index funds have a place in your portfolio, but you'll never beat the index with them." - Words of wisdom from a Fidelity rep

lightheir wrote:Curious why depreciation shouldn't matter if you're driving it into the ground.

Assuming you buy a used car, you may have to replace it a few years earlier than if you had bought a brand-new one assuming roughly equal life (from brand new to full dead) but you're skipping over those years of max depreciation. So if you save, say $5000 by buying a car 4 years old, and repeat with another used car when it dies, you'd be avoiding that initial new car depreciation hit. Or am I missing something here?

Assuming a 10 year life for a car, over the course of 40 years you will be buying 7 used cars and 4 new cars. At 20k per new car, thats 80k vs 105k for the used cars.

If you drive your cars until they are 15 years old, you will have bought 3 news cars for 60k and 4 used cars for 60k.

This all assumes that the difference between a new car and a used car is only $5,000, which seems way too low. I'd say the new car would be $20k and the used car would be, at most, $5k.

Huh? What used car are you buying!? Mine is a 2004 and it would cost more than $5000 used. For smaller fuel-efficient cars (think Corolla, Civic, etc) the price difference between new and used (2-4 years) is relatively small.

bb wrote:Buying a used car based on the prices I have seen makes no
sense.

We bought a Honda Accord in 2007. All the 3-4 year old used Accords we found were within $4-5k of invoice price for a new 2007 Accord - so we bought new. Still driving it. Hoping to pass it on to my daughter who's going to college in 2021 - but it may be too old (hence, unsafe?) for her by that time - not sure.

lightheir wrote:Curious why depreciation shouldn't matter if you're driving it into the ground.

Assuming you buy a used car, you may have to replace it a few years earlier than if you had bought a brand-new one assuming roughly equal life (from brand new to full dead) but you're skipping over those years of max depreciation. So if you save, say $5000 by buying a car 4 years old, and repeat with another used car when it dies, you'd be avoiding that initial new car depreciation hit. Or am I missing something here?

Assuming a 10 year life for a car, over the course of 40 years you will be buying 7 used cars and 4 new cars. At 20k per new car, thats 80k vs 105k for the used cars.

If you drive your cars until they are 15 years old, you will have bought 3 news cars for 60k and 4 used cars for 60k.

This all assumes that the difference between a new car and a used car is only $5,000, which seems way too low. I'd say the new car would be $20k and the used car would be, at most, $5k.

Huh? What used car are you buying!? Mine is a 2004 and it would cost more than $5000 used. For smaller fuel-efficient cars (think Corolla, Civic, etc) the price difference between new and used (2-4 years) is relatively small.

Well, I bought a 1995 Hyundai Accent in 2005. Totaled it in 2006. I bought a 1996 Dodge Intrepid in 2006. Drove it into the ground in 2012. I bought a 2001 Dodge Stratus in 2012. The total purchase price of the three cars was $1,776. Not really fair to include the third one, as it came at the family discount, but the first two were bought on the private market and both were under substationally under $1,000. My spouse drives a 2000 Toyota Corolla.

Cars bought when they're already at least 10 years old and mostly broken (maybe someday I'll have a car with a functioning heater) really brings the price down.

I didn't make up the numbers or rules, the previous poster did while wondering how he could not come out ahead.

"Index funds have a place in your portfolio, but you'll never beat the index with them." - Words of wisdom from a Fidelity rep

Cars bought when they're already at least 10 years old and mostly broken (maybe someday I'll have a car with a functioning heater) really brings the price down.

I don't think the intended (or fair) comparison was a new car vs junk car (in fact if I managed to keep this thread straight the comparison was new vs four years old). If you can keep a junker running that is a cheap alternative.

But if you want luxuries like a functioning heater I think your numbers don't really fit.

When I was younger and broke I drove junkers that I repaired myself. Definitely fine if you don't care about heaters or AC not working, broken power windows or whatever. And you don't mind having the car in repair fairly often. But if you want a car that gets you to work every day without fail, does not make you show up to work frozen or sweating, junkers probably don't fit the bill.

We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

I think this is the sort of data that is useful to a Boglehead, assuming that it's accurate. A 10+ year study would be better but it's probably not too much of a stretch to assume that a low 5-yr cost would be indicative of lower ongoing costs. Perhaps reliability data would help in weeding out the weaklings in the group.

I suggest OP read the rave review of the MB E 6.3 AMG wagon in Road & Track. We've had a string of E wagons, and are now enjoying our 2000 E 320 with over 150 kMi. We had one BMW wagon, but it was a disappointment. At 90 kMi it seemed used up. I plan our next wagon to be an AMG, not for the go fast, but for the exceptional handling and superb seats. That next wagon is likely at least five years away given how well the 2000 is holding up.

dbphd wrote:I suggest OP read the rave review of the MB E 6.3 AMG wagon in Road & Track. We've had a string of E wagons, and are now enjoying our 2000 E 320 with over 150 kMi. We had one BMW wagon, but it was a disappointment. At 90 kMi it seemed used up. I plan our next wagon to be an AMG, not for the go fast, but for the exceptional handling and superb seats. That next wagon is likely at least five years away given how well the 2000 is holding up.

db

An AMG Wagon or Caddy CTS V would be awesome. Think I will wait for a year or two to see if they start to appear on the used market at reasonable prices.

On the Tesla running out of juice, why aren't more manufacturers going with the Volt approach of using a gas engine to power the batteries? I get that it adds a lot of engineering complexity, but building a nationwide recharging infrastructure would be prohibitively expensive.

I would vote for the 4-5 year old luxury car. I like the Caddy CTS-V coupe.

I was on the waitlist for the Tesla S for over a year and just canceled my order. I am currently driving an 08 Caddy STS; bought it used when it was 3 years old at 1/3 the original cost in new-like condition.

Chan_va wrote:
On the Tesla running out of juice, why aren't more manufacturers going with the Volt approach of using a gas engine to power the batteries? I get that it adds a lot of engineering complexity, but building a nationwide recharging infrastructure would be prohibitively expensive.

I've always thought that the Volt technology makes the most sense since it substantially increases the functionality (range) of the vehicle.

As far as the expense of a recharging infrastructure, it's going to happen anyway for reasons I will not get into.

Chan_va wrote:
On the Tesla running out of juice, why aren't more manufacturers going with the Volt approach of using a gas engine to power the batteries? I get that it adds a lot of engineering complexity, but building a nationwide recharging infrastructure would be prohibitively expensive.